The former chancellor suggests that the Government should consider relaxing immigration rules as a solution to the mortgage crisis. Lord Hammond believes that the Bank of England will have to raise interest rates for the 13th consecutive time today, unless ministers are willing to address the issue of labor market supply, which could help slow down wage increases. However, implementing such a solution could be politically sensitive.
Here are 5 things to start your day:
1) Britain’s debt has surpassed its GDP as the benefits bill continues to rise. Public borrowing reached its highest level in May, excluding periods of lockdown.
2) A recession is now considered inevitable after the Bank of England lost control of inflation. Former rate setters criticize the failures of Threadneedle Street’s policies.
3) Senior politicians are urging Lloyds to be transparent in the Telegraph sale process, demanding clarity on potential buyers.
4) The release of the popular computer game “Legend of Zelda: Tears of the Kingdom” is being blamed for a surprising spike in inflation among British gamers.
5) More than 1.4 million people will struggle as surging interest rates hit their incomes, warns the IFS. Bills are expected to reach “eye-watering” levels, posing a serious shock to Britons.
Regarding the overnight developments:
Asian shares edged lower due to Federal Reserve chairman Jerome Powell’s hawkish tone on interest rates. The focus now shifts to the Bank of England’s interest rate decision. MSCI’s index of Asia-Pacific shares outside Japan is on track for a fourth consecutive day of losses, down approximately 2.7% for the week. Australia’s S&P/ASX 200 index lost 1.6%, while Japan’s Nikkei eased 0.1%. China and Hong Kong stock markets were closed for the holiday, leading to subdued trading.
Wall Street also closed lower following Powell’s comments. He warned of resuming interest rate increases this year to combat persistent inflation. The Dow Jones Industrial Average dropped 0.3%, the S&P 500 declined 0.5%, and the Nasdaq Composite Index fell 1.2%. The yield on the 10-year Treasury remained steady at 3.72%, while the two-year Treasury yield rose to 4.71% from 4.69% on Tuesday.
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